Abstract

ROSELLON, Juan; TREGEAR, Juan  and  ZENON, Eric. The HRV Model for Optimal Expansion of Transmission Networks: An Application to the Ontario Electricity Grid. Econ. mex. Nueva época [online]. 2012, vol.21, n.1, pp.133-173. ISSN 1665-2045.

This paper presents the application of a mechanism that provides incentives to promote transmission network expansion in the electricity system of the Ontario province. Such mechanism combines a merchant approach with a regulatory approach. It is based on the rebalancing of a two-part tariff within the framework of a wholesale electricity market with nodal pricing. The expansion of the network is carried out through auctions of financial transmission rights for congested links. The mechanism is tested for a simplified transmission grid with ten interconnected zones, ten nodes, eleven lines and seventy eight generators in the Ontario province. The simulation is carried out for both peak and non-peak scenarios. Considering Laspeyres weights, the results show that prices converge to the marginal generation cost, the congestion rent decreases and the total social welfare increases.

Keywords : electricity transmission; financial transmission rights (FTR); incentive regulation; loop flows; nodal prices.

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